Will NASCAR land another big TV contract Despite dip in ratings?
This month, Herbst joined NASCAR as vice president of broadcasting, a role that puts him in line to spend the next 18 to 24 months working to secure the sport’s next TV contract. He’ll report to Paul Brooks, the president of NASCAR Media Group and lead executive in NASCAR’s negotiations.
NASCAR signed its current $4.5 billion contract with Fox, ESPN and Turner Sports in 2005. The eight-year agreement began in 2007 and ends in 2014. Based on the previous deal, NASCAR will likely have a deal in place no later than 2013.
The big question in the sport: How much are networks willing to pay NASCAR after years of declining ratings and interest? Though there has been a slight gain in viewers through the early part of the 2011 season, the stock-car set lost nearly a quarter of its TV audience between 2006 and 2010.
It’s no surprise that Herbst and NASCAR are optimistic about their prospects, but so, too, are industry analysts, who point to recent sports deals for the Pac-12 Conference and others as proof of continued momentum for major TV deals.
Exhibit A: Earlier this month, the Pac-10 signed a 12-year, $3 billion contract with Fox and ESPN, an average of $250 million per year. Its former deal was worth $50 million per year.
“Live sports provides something that is unique," Herbst says. “That last real, reality programming. You don’t know what’s going to happen, week in and week out."
Mike Trager, a former Clear Channel executive who now works as an industry consultant, says those two factors (recent generous deals and the unique drawing power of sports on TV compared with other programming) are crucial. Beyond that, he points to another factor right now: the Comcast-NBC merger, fueling an appetite for sports TV deals. Comcast bid a reported $235 million for the Pac-10, for example.
For those reasons, he says major sports leagues such as NASCAR will, at minimum, garner flat rights fees from existing deals.
NASCAR Chairman Brian France mentioned the recent success of the Pac-10 in its TV negotiations, as well as the ambitions of Comcast-NBC, recently during an interview session with reporters at Charlotte Motor Speedway. While he stressed that he hopes to stay with the incumbent networks — Fox, Turner and ESPN — his mention of Comcast-NBC is sure to be interpreted as a nudge toward potential competitive bids.
In addition, such a scenario takes on greater intrigue with the recent decision by longtime NBC Sports chief Dick Ebersol to leave the network. His replacement? Mark Lazarus, who is a former Turner executive with extensive experience negotiating and working with NASCAR.
Ratings dips will play a role in what NASCAR gets from the networks, but the bigger factor is competition for sports rights, Trager believes.
“The increased competition is what’s going to set the market," Trager says. “Anyone who’s negotiating right now has got extra good timing. Who knows what it’s going to be two years from now? Networks want good, solid sports inventory and NASCAR represents that."
As for NASCAR, “They’ve peaked in terms of ratings (in 2005), but where they’ve settled in is very good," he adds. “I would think that they’re going to be a desirable commodity."
Comcast-NBC has yet to say whether it will bid for NASCAR, but, if it does, that scenario is what every sports league dreams of: fresh interest and bidding. Scenedaily.com